July 21, 2010 / 9:15 PM / 9 years ago

UPDATE 3-Baidu beats Wall Street profit, revenue targets

* Q2 EPS 35 cents vs Street’s 31 cents

* Q2 revenue $282.3 mln vs Street’s $276.7 mln

* Sees Q3 revenue $324.4 mln-$333.3 mln vs St’s $321.6 mln

* Shares rise nearly 4 pct after hours (Adds earnings details, background, updates share price)

SAN FRANCISCO, July 21 (Reuters) - Chinese Internet company Baidu Inc (BIDU.O) more than doubled its second-quarter profit, beating Wall Street expectations, as a surge in new advertisers helped boost the company’s revenue.

Shares of Baidu, which gave a better-than-expected revenue forecast for the current quarter, rose 3.8 percent to $76.10 after hours after closing down 73 cents at $73.31.

“Baidu continues to outperform across the board driven by a strong search advertising market in China, the launch of its Phoenix Nest (advertising) platform and share gains from Google Inc (GOOG.O) China,” said Kaufman Brothers analyst Mayuresh Masurekar.

Baidu said it had 254,000 active online marketing customers in the second quarter, a 25.1 percent increase from a year ago, and its largest gain since the fourth quarter of 2008.

Baidu said revenue in the three months ended June 30 totaled $282.3 million compared with $160.7 million a year ago. Analysts, on average, had expected revenue of $276.7 million, according to Thomson Reuters I/B/E/S.

The company’s net income was $123.5 million, or 35 cents a share, compared with $56.1 million, or $1.61 a share a year ago, before Baidu implemented a 10-for-1 stock split. Analysts, on average, were expecting earnings per share of 31 cents.

Baidu said it expected revenue between $324.4 million and $333.3 million in the third quarter. Analysts are expecting revenue of $321.6 million.

Baidu owned 70.8 percent of China’s search market in the second-quarter, a 3 percentage point increase over the last quarter, said iResearch. [ID:nTOE66I03Y]

Google has had privacy and censorship issues in China, the world’s largest Internet market, which had threatened its future in that market. On July 9, Google said China had given it approval to keep operating its Chinese search page for one year, resolving a months-long censorship dispute.

Google’s market share in China fell to 27.3 percent in the second quarter from 29.5 percent in the previous quarter.

Baidu’s stock has soared 90 percent since Google’s troubles in China began in January.

Baidu has also benefited from its new Phoenix Nest advertising keyword system, implemented in December, which provides a more sophisticated way to track user traffic.

Baidu Chief Financial Officer Jennifer Li said in a statement on Wednesday that the company would continue to aggressively invest in research and development, sales and infrastructure. (Reporting by Alexei Oreskovic and Melanie Lee; editing by Bernard Orr)

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